Pension Protection Act for Plan Restatements
By April 30, 2020 Defined Benefit Plans are to be restated.
Failure to have the plan restated may result in penalties and/or the disqualification of the plan.
-Why/When do I need to restate my plan?
It is required by the IRS that a Plan be restated periodically. A plan should also be restated to accomodate any changes that were made to the design of the plan or to recognize a change in business structure.
"Pre-approved" plans (also referred to as "prototype plans" or "volume-submitter plans") are to be restated every six years, these plans are reviewed by the IRS before they are adopted by employers to ensure legal sufficiency. These plans will be acknowledged by the IRS with an opinion letter stating that the plan document was designed in accordance of the IRC.
Aside from "Pre-approved" plans there also exists "Individually designed" plans. These plans are created without the language that has been pre-approved by the IRS and must be restated every (5) years. "Individually-designed plans can be submitted to the IRS for a fee on an employer-by employer basis.
Defined Benefit Plans must adopt PPA (Pension Protection Act) provisions no later than April 30, 2020.
If the plan is not restated by the deadline, disqualification of the plan may occur or penalties issued to the plan sponsor.